RIYADH: Oman’s improved fiscal position prompted international credit rating agency S&P Global to upgrade the country’s outlook from stable to positive. It also affirmed the long- and short-term foreign and local currency sovereign credit ratings at “BB+/B,” according to a press release. This comes as the agency believes that the Oman government’s fiscal and economic reforms, particularly those targeting operational efficiencies and stronger financial profiles for state-owned enterprises, will continue. Additionally, the positive outlook reflects S&P’s view that this would strengthen the economy’s resilience to adverse oil price shocks. “The government’s balance sheet will strengthen, and the economic reform program could lead to faster-than-expected deleveraging in many state-owned enterprises, without dampening economic growth outcomes,” the agency stated in a statement. It added: “We expect the government’s fiscal and economic reform momentum will continue over 2024-2027.” The rating agency also anticipates Oman’s real gross domestic product to grow by approximately 2 percent annually on average from 2024 to 2027. Furthermore, S&P projects that Oman’s foreign policy is expected to maintain a broadly neutral stance, with minimal spillover effects on the country in the event of regional geopolitical conflicts. In January, Oman forecasted a budget deficit of 640 million rials ($1.66 billion) for 2024, a reversal from a surplus in 2023, attributed to lower oil production and prices impacting public finances. Similar to its Gulf oil and gas exporting counterparts, Oman aims to diversify its income sources and economic sectors away from hydrocarbons. However, it remains predominantly reliant on oil revenue. In December 2023, further enhancements in Oman’s debt burden prompted US-based Moody’s Investors Service to upgrade its credit rating for the second consecutive time last year, elevating it from “Ba2” to “Ba1.” The upgrade in rating at the time was attributed to improvements in debt affordability metrics, as stated in a press release. This positive shift, reported at the time, primarily resulted from spending restraints and the utilization of additional revenues to reduce public debt. In September 2023, S&P upgraded Oman’s credit rating from “BB” to “BB+” on account of firmer macroeconomic fundamentals.